Dar Credit and Capital Limited, a financial services company specializing in providing credit solutions to low-income individuals including class-four (Group D) municipal workers and small-scale shopkeepers, launched its Initial Public Offering (IPO) in May 2025. The company also emphasizes empowering women entrepreneurs through its credit offerings.

IPO Details and Subscription Status

The Dar Credit and Capital IPO is a Book Built Issue with a fresh issue of 42.76 lakh equity shares, amounting to ₹ 25.66 Crores. The IPO subscription opened on May 21, 2025, and closed on May 23, 2025. Investors had the opportunity to apply with a price band set between ₹ 57 and ₹ 60 per share. The minimum lot size was 2,000 shares, requiring retail investors to invest at least ₹ 1,20,000, while High-Net-Worth Individuals (HNIs) had to apply for a minimum of two lots (4,000 shares).

By the final day, the IPO was subscribed an impressive 98.67 times, signaling strong investor interest. The shares are slated to list on the NSE SME platform around May 28, 2025, with the allotment expected to be finalized on May 26, 2025.

Company Background and Focus

Dar Credit and Capital primarily serves low-income workers such as cleaners, sweepers, and peons in municipal roles, a segment often underserved by formal credit institutions. The company also caters to small-scale vendors and shopkeepers, maintaining a significant focus on women-led micro and small businesses. This targeted approach aims to fill a critical gap in financial inclusion.

The company is led by Mr. Ramesh Kumar Vijay, the Promoter, Chairman, and Whole-Time Director. He holds notable qualifications including a Bachelor’s Degree in Commerce, Chartered Accountant, and Company Secretary certifications, backed by 39 years of industry experience in personal loans and MSME financing.

Financial Performance

Dar Credit and Capital has demonstrated steady revenue and profitability growth over the past few years:

• Revenue for FY2024 stood at ₹ 3,301.38 Lakh, up from ₹ 2,556.97 Lakh in FY2023.

• EBITDA rose to ₹ 2,203.86 Lakh in FY2024.

• Profit After Tax (PAT) increased to ₹ 396.83 Lakh for FY2024, reflecting healthy operational efficiency.

The company reported a pre-issue EPS of ₹ 3.97 and a post-issue EPS of ₹ 2.78 for FY24, with corresponding P/E ratios of 15.11x (pre-issue) and 21.59x (post-issue), compared to an industry average P/E of 6.00x. Return metrics such as ROCE (9.22%), ROE (6.17%), and RoNW (5.64%) indicate modest returns relative to industry peers.

IPO Pricing and Grey Market Premium (GMP)

The IPO price band is set at ₹ 57 to ₹ 60. Based on the Grey Market Premium, the listing gains are expected at around ₹ 5 per share, indicating a potential listing price of ₹ 65, an 8.33% premium over the upper price band.

However, investors should exercise caution as the GMP is an informal indicator based on unregulated demand-supply dynamics and not a guaranteed reflection of market performance.

Anchor Investors and Market Makers

Dar Credit and Capital successfully raised ₹ 7.29 Crores from Anchor Investors at ₹ 60 per share, allotting 12.16 lakh shares from the Qualified Institutional Buyers (QIBs) portion. GYR Capital Advisors Private Limited serves as the Book Running Lead Manager, with KFIN Technologies Limited as the Registrar and SMC Global Securities Limited as the Market Maker.

Investment Recommendation

While the IPO has generated strong subscription numbers, the company’s valuation appears fully priced with P/E ratios notably higher than the industry average. Given the modest returns and niche market segment, investors seeking listing gains should consider avoiding this IPO. The strong GMP may reflect speculative interest rather than fundamental valuation upside.

Dar Credit and Capital’s IPO offers a unique opportunity to invest in a company focused on financial inclusion for underserved segments and women entrepreneurs. Yet, potential investors should weigh the premium valuation and market risks carefully before investing.

The Upcoming IPOs in this week and coming weeks are 3B Films, N R Vandana Tex Industries, Scoda Tubes,Neptune Petrochemicals, Astonea Labs, Nikita Papers, Prostarm Info Systems, Victory Electric Vehicles International, Blue Water Logistics, Wagons Learning..

The Current active IPO are Aegis Vopak Terminals, Schloss Bangalore, Unified Data - Tech Solutions.

Start your Stock Market Journey and Apply in IPO by Opening Free Demat Account in Choice Broking FinX.

Join our Trading with CA Abhay Telegram Channel for regular Stock Market Trading and Investment Calls by CA Abhay Varn - SEBI Registered Research Analyst.